Councils dispute debt figures

Last updated 12:58 12/06/2014

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Tasman district has the ninth-highest level of liabilities per ratepayer and Nelson city the 26th, according to a report from lobby group the Taxpayers' Union, which has taken data from council reports and turned it into an online tool.

The Ratepayers' Report (ratepayers report.co.nz) allows residents to compare the country's 67 territorial authorities. The data was checked by Fairfax Media and supplied to councils for them to review prior to publication.

Taxpayers' Union executive director Jordan Williams said the Nelson City Council was performing moderately compared with other unitary authorities, but Tasman appeared to have more room to improve.

"Nelson are sitting around the average in terms of residential rates and operating expenditure per ratepayer. There is a concern that Tasman's average residential rates are high and that its liabilities per ratepayer are at the upper limit for what is prudent."

The figures show that the Tasman District Council's level of liabilities per ratepayer is $7729, while assets per ratepayer are $59,461.

Nelson city has a liabilities level of $4277 and an asset level of $64,931.

"Both Nelson and Tasman are weaker than the similar-sized, well-performing unitary Gisborne District Council, and have worse overall statistics compared with Marlborough," Williams said.

Tasman's corporate services manager Mike Drummond said the report bunched regional and district councils and unitary authorities together, ignored each council's economic and settlement history, and did not delve into rating information.

His concerns were backed by Local Government New Zealand (LGNZ)-commissioned analysts Grant Thornton. Its report shows that all metropolitan and regional councils are sound, and the large majority of rural and provincial councils are sound or very sound.

Drummond said the Taxpayers' Union's simplistic comparison of councils made no allowances for the extra work done by unitary authorities such as Nelson and Tasman, which did all the combined jobs of regional and district councils. Nor did it consider the number of population centres a council managed.

"Marlborough has one big population centre, as does Nelson. Tasman has 17 settlements, and some of them are significant," he said.

The information also did not take multiple occupancies, such as retirement villages, into account when setting average rate levels, Drummond said.

"You have to be very careful in drawing across-the-board comparisons."

The Tasman council remained focused on reducing its reliance on debt, he said. By using savings to offset debt, it had managed to include a number of key infrastructure projects in the new 2014-15 annual plan while only increasing its debt by about $1 million over the previous financial year.

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Tasman Mayor Richard Kempthorne acknowledged that the council's rate and debt levels were high. "But that's because we are a growing council and have invested significantly in the core infrastructure of roading, water, wastewater and stormwater."

Nelson City Council governance committee chairman Ian Barker said the council had a good credit rating, and was working to repay debt while balancing the city's infrastructure needs.

"I am pleased that our council has a Standard & Poor's long-term credit rating of AA- with a positive outlook [meaning a one in three chance of an upgrade in the next two years].

"At the core of that rating of our council's position is our focus on keeping debt and resulting interest costs at a prudent level for a council of our size," Barker said.

"As a priority, council looks for opportunities to repay debt without compromising the core infrastructure we are responsible for maintaining.

"For instance, 3 per cent of the proposed rates rise in the current 2014-15 annual plan is earmarked to repay debt in the disaster recovery fund, to repay the costs of the December 2011 storm event and build the fund faster, in order to cover the cost of future events should they occur."

LGNZ president Lawrence Yule said the Grant Thornton report showed that most councils were in good financial health and using best-practice financial management.

LIABILITIES (DEBT) PER RATEPAYER

Auckland Council $15,858

Dunedin City $15,093

Christchurch City $13,606

Waitomo District $10,771

Tauranga City $9971

Hamilton City $9177

Taupo District $8753

Western Bay of Plenty District $8745

Tasman District $7729

New Plymouth District $7607

Nelson City $4277

- Nelson

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